Analyst Sean McGowan of Roth MKM maintained a Buy rating on Groupon (GRPN – Research Report), with a price target of $28.00.
Sean McGowan has given his Buy rating due to a combination of factors including Groupon’s significantly reduced cost structure and the anticipated resumption of revenue growth. His analysis suggests that while the fourth quarter of 2023 might not show an increase in revenue, the decrease is expected to slow, and guidance for 2024 indicates potential growth. McGowan’s expectations for the company’s fourth-quarter revenue and adjusted EBITDA are above the consensus, reinforcing his positive outlook on the stock.
Moreover, McGowan projects a notable improvement in Groupon’s operating expenses, primarily due to a substantial reduction in selling, general, and administrative expenses, which supports higher profitability. The improvement in Groupon’s contribution margin, which surpasses both the previous year’s figures and consensus estimates, is another factor underpinning the Buy rating. Additionally, the valuation is based on forecasted revenues and adjusted EBITDA for 2025, with multiples that suggest the stock could be undervalued compared to its peers, presenting an opportunity for upside potential.
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Based on the recent corporate insider activity of 10 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of GRPN in relation to earlier this year.
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Groupon (GRPN) Company Description:
Groupon, Inc. operates as a global scaled two-sided marketplace that connects consumers to merchants. The firm provides marketing services by selling vouchers through online local marketplaces. It operates through North America and International segment. The company was founded by Andrew D. Mason, Eric Paul Lefkofsky, and Bradley A. Keywell on January 15, 2008 and is headquartered in Chicago, IL.
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